Is it Time to Outsource your Payroll? - ARE YOU READY FOR SINGLE TOUCH PAYROLL?

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With the advent of Single Touch Payroll (STP), many organisations are reviewing their payroll processes and asking themselves, should we outsource our Payroll?

As business functions become more specialised and time remains an irreplaceable commodity, organisations are increasingly outsourcing essential services. When organisations outsource payroll, it allows them to minimise financial risks and focus on core business, leaving the complexities of payroll, systems and compliance to experts.

With careful planning, the benefits of when you outsource payroll capabilities can be realised almost immediately. So what are the considerations in an outsourced payroll function?

1. Save Time

Time is one of the most valuable resources we have. The key to saving time with any outsourced business function is a detailed scope of requirements, roles and responsibilities. Time spent on compliance, regulations and training staff on using internal systems is eliminated. Cloud-based payroll services can also give more control to employees, eliminating time spent by HR updating entitlements, leave and benefits.

Time previously occupied by data entering can also be saved when payroll and HR systems are able to access the same data. With fewer mistakes, time spent coordinating and cross-checking information can be eliminated.

2. Save Money

Completing your payroll functions in-house comes at the cost of having your own payroll team. This practice is considerably expensive, by paying associated wages and benefits of employing the team, not to mention the other employment costs, such as ongoing learning and keeping up with legislation (such as new changes like Single Touch Payroll), staff-retention, recruitment costs, IT infrastructure, office space and associated utilities.

If your business is reasonably small in size, there’s a high chance that the cost of employing this individual or team would be significantly greater than the cost of using an outsourced payroll service.

Investing in customised software solutions is increasingly being replaced by cloud-based solutions. Payroll services providers manage, maintain and improve secure platforms with highly skilled and specialised engineers and business process managers.

3. Focus on Your Core Business

What began as a trend has become the status quo. Every small business already outsources at least one critical function: telephony and internet access. Websites are hosted externally; email services, accounting software, sales and inventory management have proven invaluable as outsourced products and services.

The introduction of Single Touch Payroll (STP) and other legislative changes planned for the future require significant changes to the way your report payroll. These changes to systems and process are not only costly but time-consuming. When organisations outsource payroll services it allows them to focus on the business functions that generate revenue and invest in strategic resources that increase value and drive growth.

4. Compliance

Staying complaint needs to be a top priority and maintaining your own payroll team comes at the cost of providing effective training. To ensure compliance, you must ensure that your payroll employees are always up-to-date with the latest government regulations and any changes in policies. Providing this training is time-consuming and costly. Those who choose to use outsourced payroll gain access to payroll experts to ensure that the minimum standards are adhered to without having the worry or financial burden of providing the latest training.

Not being complaint leaves your business exposed and subject to heavy penalties. Single Touch Payroll (STP) is no different. It adds another layer of complexity to your business. Having an outsourced payroll provider gives you peace of mind. Your payroll process and compliance obligations are streamlined and taken care of by professionals who “live and breathe” payroll.

Furthermore, the complexity of workplace agreements and EBAs virtually guarantees costly errors within an organisation. The Australian Government’s National Employee Standards (NES) provide a frame of reference for minimum compliance that requires vigilance and expertise to remain compliant.

5. Improved Security & Risk Management

Managing your payroll in-house can add significant risk to the entire business. Since banks have become more security aware, criminals have moved on to payroll and invoicing. Payroll systems are particularly lucrative, with identity information providing an added bonus to the vast sums being stolen.

Other associated risks include identity theft, misuse of profits and the interference with your business records. Keeping your data localised in the office is always a risk which depends on security software for its protection, which must also be provided at your expense. Another benefit of outsourcing is that the protection of your data will be met the payroll provider. This will eliminate the risk and hassle of protecting it within your environment.

Online and digital security is complex and costly. Outsource payroll providers invest in highly skilled specialist staff to maintain robust payroll systems that are fully secure.

6. Business Continuity

Processing payroll is hardly an easy feat. Not only does it require a complex understanding of a web of regulations but also how the framework applied to your particular business. In recruiting your own payroll officer or payroll team, you encounter the risk of an employee leaving, and this knowledge leaving along with them. Training and onboarding a new payroll officer for your specific business can be a major task, often leaving your payroll processing in jeopardy while knowledge transfer and retraining takes place.

Outsource payroll services can be relied on to maintain a consistent approach to payroll management. There’s no need to induct employees on logic or how technology platforms operate. Role transfer can be reduced to the functions and outputs of the payroll service.

7. Simplify Reporting

With complete transparency and immediate access to accurate information that doesn’t need to be verified, management can more effectively plan for growth and predict changes to staffing needs.

8. Financial Loss & Reputational Damage

Choosing to complete your own payroll comes at the serious risk of paying a penalty for a mistake. Consider the risk of unintentionally omitting information, making a late tax deposit, or incorrectly classifying a worker’s employee type. These a just some of the common mistakes which can lead to hefty penalties and media exposure. If you do choose to outsource your payroll, you can seriously reduce run the risk of having this type of reputational or financial consequence.

If you would Iike to talk to us about outsourcing your payroll – contact us via the phone number above or lodge an enquiry to we will be more than happy to assist.

 

 

 

Is it Time to Outsource your Payroll?

 

 

 

 

 

 

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